TaxTMI 
TaxTMI 
2017 (2) TMI 998
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....ng home, filed its return of income declaring the total income of Rs. 2,23,012/-. Assessment order u/s 143(3) was framed by the A.O determining the total income of Rs. 74,07,590/- after making addition of Rs. 71,57,500/- as long term capital gain on transfer of tenancy right. 3. Aggrieved by the order of A.O, the assessee preferred first appeal before the Ld. CIT(A), who after hearing the assessee confirmed the assessment order. Against the said order the assessee preferred second appeal before the ITAT. The ITAT vide its order dated 27/07/2005 confirmed the order of the CIT(A). Thereafter the assessee filed miscellaneous application before the ITAT. The ITAT after hearing both the parties remitted the issue regarding cost of acquisition o....
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....ances of the case and in law, the CIT(A)-2, Mumbai has erred in holding that taking the cost of acquisition of tenancy rights at NIL by the A.O was mistake apparent from records." 2. "On the facts and in the circumstances of the case and in law, the CIT(A)-2, Mumbai has erred in directing the A.O to work out capital gain on surrender of tenancy rights after taking into account the cost of acquisition of tenancy rights as worked out by the registered approved valuer and allow the benefit of indexation of this cost of acquisition as per provisions of sec 48 of the I.T.Act." 5. Before us the Ld. DR relying on the order passed by the AO submitted that the Ld. CIT(A) has wrongly held that the AO should not have taken the acquisition right a....
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....ition of tenancy rights if nay and granting benefit of indexation in respect of the same. We, however, make it clear that onus is on the assessee to demonstrate that there was indeed a cost of acquisition for the tenancy rights and to quantify the same. In case the assessee can successfully demonstrate the cost of tenancy rights, the assessing officer shall give proper deduction from the capital gain by way of reducing the indexed cost of acquisition of tenancy rights for calculating capital gain to that extent modify our order dated 27/07/2005." 8. In the light of the above observations, the Ld. CIT(A) has rightly pointed out that the A.O has not given correct appeal effect to the order of the ITAT. The Ld. CIT(A) has further pointed out....
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.... the said documents the AO could have safely concluded that the assessee firm had paid Rs. 9,500/- in 1950 towards acquisition of business including tenancy rights. Hence, in our considered view the AO has wrongly treated the cost of acquisition of tenancy as NIL. 10. In DCIT vs. Shri. Bhupindra Singh Anand in ITA No. 7743/M/2012 for the A.Y. 2007-08, the co-ordinate Bench vide order dated 12.9.2014 has decided the similar issue in favour of the assessee and against the revenue. In the said case, the issue before the Tribunal was whether the Ld. CIT(A) erred in allowing the indexation on cost of acquisition of the tenancy rights as on 01/04/1981, without taking into consideration the fact that the cost of acquisition of tenancy rights acqu....